Companies gird for removal of quotas

by Staff -- Home Textiles Today, 1/26/2004 12:00:00 AM

NEW YORK —

If 2002's West Coast strike was any indication, the United States has a lot on its plate before quotas are dropped on Dec. 31.

Erik Autor, vice president and international trade counsel for the National Retail Federation, spoke to investors at SG Cowen's recent consumer conference about duties, quotas and the other issues facing U.S. companies.

"2004 will very likely be a difficult year for trade, particularly for retailers," he said, which "represent a significantly important community."

The fact that there will be no quota in 2005 is already affecting this year's quotas. Traditionally, companies were able to use the quota system's safety valve — called "carry forward" — which let them borrow 6 percent from the next year's quota if they were butting up against the current limit, Autor said. However, companies don't have that option this year, leaving them with no wiggle room.

"Consumer demand is increasing," he said, and apparel retailers, aware of the tight quotas, are planning accordingly.

Political polarization has also increased, he said. "Congress is more politically divided than in recent history," he said, and the conflict has "bled into the trade sector."

Overall, trade agreements are going to be hard to get through Congress, he predicted.

One bill, introduced by Senator Chuck Schumer (D.-NY), proposed an automatic 27 percent duty on all goods coming from China, because it alleged China manipulates currency, Autor said. The bill died, but if it had come up for a vote it would have won, he said, which "is scary."